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Eurozone Inflation May 2016

Eurozone: Eurozone consumer prices linger in negative territory in May

June 16, 2016

More complete data released by Eurostat on 16 June confirmed that harmonized consumer prices fell 0.1% over the same month last year in May. The result followed April’s 0.2% decrease and was in line with the preliminary estimate. According to Eurostat, the main contributors to May’s negative reading was transport and energy prices, while, the largest upward contributions to prices came from restaurants and cafes and from tobacco.

Core inflation inched up from 0.7% in April to 0.8% in May. Annual average inflation was steady at April’s 0.1%. Meanwhile, harmonized consumer prices increased 0.4% in May on a monthly basis, which was slightly above April’s 0.1% rise.

Looking at the countries in the common-currency bloc, 11 of the 19 Eurozone economies showed inflation rates equal to or above the regional average. Belgium (1.6%), Malta (1.0%) and Austria (0.6%) were the economies with the highest rates. In contrast, Cyprus (-1.9%), Spain (-1.1%) and Latvia (-0.8%) were the economies that registered the largest annual declines in HICP consumer prices. Among the largest economies in the Eurozone, consumer prices declined annually in Italy and recorded zero growth in Germany. While France was the only major economy to record inflation in May.

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 0.2% in 2016, which is unchanged from last month’s forecast. For 2017, panelists expect inflation to average 1.4%.